18 July 2013 – Kenya’s Energy Regulatory Commission (ERC) expects the country’s electricity demand in near future to increase by at least 11% a year due to accelerated connectivity in urban and rural areas, population and economic growth.
ERC’s director general, Kaburu Mwirichia is reported as saying that Kenya’s total generation capacity up to the year 2016 will be 2,371 MW from 27 power plants planned to be commissioned in tandem with demand.
A report by the East African says that KenGen, and Kenya Electricity Transmission Company have been investing in power generation and transmission capacity even as new independent producers come on board.
The new investments aim to bring down the cost of connections in the next five to 10 years, enabling more households to access electricity. Demand for electricity is driven by the country’s growing economy, resulting in a middle class with spending power and an expanding informal business sector.
According to the World Bank, only 15% of households in the region are connected to national grids. Tanzania has the highest number of households without electricity at 7.2 million. This is followed by Kenya at 6.2 million, Uganda at 5.5 million, Rwanda at 1.7 million and Burundi at 1.4 million.
Kenya Power says the cost of connecting an additional consumer has gone up from US$823 to US$1,176 due to the huge capital needed to invest in transmission infrastructure.
A recent study by the Lighting Africa programme of the World Bank shows that even though Kenya’s power grid is more reliable than any of its east African counterparts, the country still experiences an average of seven blackouts a month. Rwanda experiences the highest number of power outages averaging 14 per month, followed by Burundi and Tanzania both with 12. Ugandans expect 11 blackouts a month.
Kenyans are already burdened by heavy power bills caused by the high cost of fuel and exchange rates given that the country gets 34% of its electricity from thermal power. Erratic rainfall due to climate change and breakdown of machinery at hydro power plants, often forces the country to turn to thermal power sources to compensate for shortfalls.
Kenya Association of Manufacturers chief executive officer Betty Maina says energy costs account for up to 40% of production expenses, hurting Kenya’s global competitiveness.
“One would rather have expensive but consistent and reliable power, than rationing which will result in massive losses as a result of non- productivity,” she says, adding that the high cost of power had eroded the competitiveness of the local manufacturing industry in the face of competition from Egypt, South Africa, and South East Asia that enjoy cheaper power.
According to the permanent secretary in the Ministry of Energy Patrick Nyoike, medium speed heavy fuel oil plants by several IPPs — Thika Power Ltd (TPL), Gulf Power Ltd (GPL) and Triumph Power Generating Ltd (TPGL) — and a geothermal power facility by Ormat will be cheaper options compared with hiring emergency diesel generators.